CHOICE OF TRUSTEES

Evening Post, Volume CVI, Issue 55, 13 September 1928, Page 17

CHOICE OF TRUSTEES

MARKED DIFFICULTIES CORPORATE TRUSTEESHIP The difficulty often experienced in securing suitable persons to act as trustees is tho subject of an interesting section in the annual report to Parliament of the Public Trustee (Mr. J. AY. Macdonald). ■•; "No . unprejudiced observer of modern life,"says Mr. Macdonald, "will dispute the importance attaching to the administration of trusts and the estates of deceased persons, which is the.principal duty devolving on the Public Trust Office. The instrument of trusteeship is an ancient device of civilisation, and with the economic progress of our. highly industrialised age, the springing into existence of new forms of wealth, and the' amassing of larger fortunes than in the agrarian era, trusteeship and the administration of deceased persons' estates generally have not only continued their existence but have assumed a prominent place in our midst. When wo think of the eomploxity of the social and economic structure of our civilised world to-day and the magnitude of tho accumulations of wealth in numerous instances, it is not to be wondered at that the administration and devolution of property attract increased attention. Formerly the forms of investment or storage of wealth were comparatively few and simple, and the acquisition and possession of land were deemed of primary importance. The ownership _of land conferred a social prestige, and the wishes of the land-owning classes dominated tho political and social structure, so that their cherished desires as to the devolution of property prevailed. However, since tho rise of industrialism, the spread of civilised peoples to new countries where old associations were perforco broken with, and still more on account of economic compulsion in every country, the attitude to property has radically changed not only as to those forms which it is deemed desirable to possess and to store up, but also as to its use in the owner's lifetime and its devolution after his decease. Everywhere we have ample manifestation that tho old stereotyped forms of devolution are no longer slavishly adhered to by the majority of the propertyowners in the community. A most striking example of this change is the recent revolution which has taken place in England in this respect by the passing of the Property Acts, which came into force in 1926. A COMPLEX BUSINESS. > "Each property-owner has his own particular desires as to tho disposal of his possessions, so that trusteeship nowadays often involves the handling of a large volume of property and the undertaking of the administration of very complex interests, bequeathed or otherwise devolving in multifarious ways. When we contemplate tho vast flow of property which passes through fiduciary channels wo begin to rcaliso how much in our modern business and social life we are dependent upon fiduciary service for the conservation and protection of the wealth of the community. Needless to., say, the choice of a trustee has always been a problem of paramount importance, calling forth, as it does, con^derations of his bona fides and qualifications for the often onerous and always trustworthy nature of" the responsibilities of his ofiiee. "Inevitable changes in the personnel of fiduciaries —death, disqualification, and other causes —are disturbing factors which may soon remove_ any persona,!, attachment or association, sever any' fronda 'of *f rieridsh ip~which- 'the original trustees may have- had towards their trust, and cause a trusteeship to devolve upon incompetent or undesirable individuals. " In these days the ramifications and intricacies of commercial and other interests devolving on trustees not infrequently exact a toll of specialised knowledge and experience which is not easy to provide. The extension of the philanthropic spirit and the creation of numerous trusts, at times of considerable magnitude- and of more or less perpetual or, at any rate, of long-continuing duration, for eleemosynary purposes or for tho social amelioration or benefit of sections of the community render it even more desirable than formerly that there should bo a continuity and permanence in their administration. Furthermore, there is the omnipresent need for the sucurity of the corpus and the income of the trust, a requirement which far transcends all others in its importance. DIFFICULTIES IN EARLY DAYS. "Ever since the institution of trus-| teeship there has always been a difficulty to choose suitable trustees. This difficulty was very pronounced in the early days of the Dominion, and with the increased complexity of property interests it is even more pronounced now. In the infancy of New Zealand persons desiring to make provision for their children or dependants, or to settle property by will or in any other way, found it no easy matter to select friends and others willing to assume the duties of trustees and at the same time possessing the necessary qualifications to enable them to fulfil those duties in a satisfactory manner. Moreover, in the earlier stages of colonisation, the colonists were busy men, whose places of residence frequently changed, and who were principally engaged in the hard pioneering work of felling and clearing their holdings and bringing them into cultivation, in making roads and constructing necessary works, and generally setting up habitations for themselves and their families, and turning tho wilderness into a smiling countryside. "The difficulty experienced by tho early colonists in securing suitable persons to act as trustees, far from disnppearing with closer settlement and development and the consequential changes in social and business conditions, is still very marked. In these days of specialisation and of increasing stress of business competition men generally find it necessary to..,devote their principal energies to the particular field into which they have entered, and therefore, as I have stated on previous occasions, as a riilo ' they do not feel disposed to be burdened with the duties of executorship or trusteeship, especially when they realise the responsibilities which these offices entail.